Why is the market turning defensive?

  • On 29 October, indices weakened in volatile trading throughout the day. Even the entry of market-supporting funds in the afternoon failed to halt the decline. The leading sectors were concentrated in high-dividend stocks, indicating a defensive preference among investors.
  • Technology sectors fell across the board as overall third-quarter earnings were weak. The report says that, apart from PCBs, the trend in growth rates across related themes was generally downward, and investors who had previously pinned their hopes on third-quarter results chose to reduce their positions.
  • The report judges that a further decline driven by momentum the following day could trigger a rebound after sentiment reaches a low point. Funds had bought stocks for two consecutive days, so it views the following morning as a point for a speculative trade.

Will capital return after the split in robotics?

  • Robotics and commercial aerospace were relatively strong that day, but robotics stocks also diverged. The report believes the weakness in robotics was largely dragged down by declines in semiconductors, chips and computing-power hardware, and expects capital to potentially return the following day after the substantial divergence.
  • Commercial aerospace drew away some capital from robotics. However, Jiangshun Technology, a high-flying stock in the sector, failed to hold its daily upper limit in the afternoon, shaking the report's confidence in the sector's staying power.
  • Another source of pressure on sentiment is that high-flying stocks are ending their runs of consecutive limit-up sessions early and entering a phase of trading around abnormal-trading thresholds. This could lead to an accumulation of high-flying stocks experiencing volatile swings. The report worries that a delayed sell-off could follow an expansion in crowded positions, while noting that this will not necessarily happen but is worth guarding against.

How do satellite-terminal orders connect to capacity expansion?

  • Shengyang Technology, a key focus of the report, entered the satellite ground-reception terminal market through its subsidiary FTA using DVB-NIP technology. In the first half of 2026, the company's satellite communications terminal revenue was 112 million yuan, double the year-earlier level and approximately 18% of company revenue.
  • FTA secured orders totaling nearly 13 million US dollars from CANAL+GROUP and established partnerships with satellite operators including SES and Eutelsat. Its net profit in the first half was 12.009 million yuan.
  • The company announced a private placement plan worth 1.076 billion yuan, of which 137 million yuan is intended for an intelligent manufacturing production line for satellite internet communications terminals. The report's logic is to use existing orders to drive capacity construction, then use the added capacity to fulfill orders.